CPS - Earnings call transcript Q1 2022 | Cooper-Standard Holdings Inc.

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Operator

Good morning, ladies and gentlemen, and welcome to the Cooper-Standard First-Quarter 2022 Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode.

Following the companies prepared comments, we will conduct a question-and-answer session. At that time.

If you have a question, [Operator Instructions].

conference on being replay the this will and later reminder, available be Cooper-Standard a call recorded is webcast today. As website for to Investor now Hendrickson, would like turn call I to Director Relations. over of the Roger

Roger Hendriksen

and Thanks Chief our the call to Banas, taking Financial appreciate morning Jon time the who team Jeff good Executive will Kevin Chairman members with join are of call President you morning on and Vice The We and you everyone. Officer. today. Officer, leadership our and be Edwards, Executive speaking this Chief

you Before we begin, that I this contains need to statements. remind forward-looking presentation

uncertainties. made While believes are assumptions be and factual that based they and information to and do certain on current statements reasonable, currently management these plans risks involve

we in financial periodic most way, This with exchange Edwards. I For the the you this reconciliations formalities presentation the presentation. non-GAAP forward-looking of measures to measures, over that also of X to out call and to information refer With filings appendix included GAAP and Slide on non-GAAP directly measures will included the the statements contains their of commission. presentation statements, those ask the in securities company's to are Jeff comparable turn more financial

Jeffrey Edwards

on quarter. that key We shape performed in our the provide initiatives outlook. review of our indicators operations our Thanks and Roger. Good broader morning of everyone. X, quarter will begin fourth some some To key appreciate Slide provide the results opportunity the highlights to how an on business we update or

and importantly, customers and customer products safety to world-class is XX% and well hours perfect that XX our performance plants In just the at of our and quality like rate continues be of Incidents the X.XX was scorecards in safety At thank XXX,XXX the our recognize Most what first for outstanding. product our total quarter, target below for green of quarter, outperforming of the X.XX. for XX% the would considered execute our keeping to quality a for the record safety continued at worked Reported safe. X our to green launch. We specifically levels quarter. services end teams maintained delivering I plants were world-class our rate of incident were employees Cooper-Standard and to

and continually possible. We focused X manufacturing, were employees is incidents incidents initiatives ultimate production are are striving these able demonstrate our achieving of teams X certainly quarter. the the operations, million all savings the in our to Despite XX efficiencies at facilities, at to than lower way deliver and and purchasing and our $XX goal of for lean volumes leading continue locations that expected dedicated in improving through

inflationary costs we're saw cash and of volume were we we're as remaining aggressive or in quarter March. plan, progressed a on why below our is I costs. delivered improvement size we continue few face positive take fixed impacts in Our and the and to customer actions from volatile SGA&E our as offset $X minutes. In production Despite efficiency the months-to-month provide seeing we energy, volume improved well imposed volumes, to we markets, continue $X million the color expense the all to labor. right reduced benefits this In operating year-over-year to our progress in the more only significant challenges materials, past the widespread in production low our restructuring labor in in continuing recover transportation, mitigate during hyperinflation business. certain million actions the down was availability environment, tight quarter. the incremental This headwinds flow month quarter. Unfortunately, partially will ongoing and schedules, on

X. Moving Slide to

strong the culture sustainability. our of company to world-class proud and with our respect we've of with relationships the As proud you towards we're We're know, status progress we're established making developed we've equally customers. the within

the from our named continued our these the quarter, GM relationships outside Ethical for this and we've with the in values in Companies. of [Indiscernible] to all garner types is others prestigious were core service year. quarter, to again, We continue customers indicators our this consecutive shaping believe that believe we success. We of long and a And were and of relationships to our list straight recognition how pleased are year This supplier fundamental customer included received recognition, award. growth In XXXX culture. term be third these organization year our recognition. the marks Xth the commitment again Most to This received we've are our stakeholders. recent quality, Also we we marks of

find more later information sustainability can our which responsibility in online month. detailed corporate efforts on will published report, You our this be

rest have operating in delayed macro increases, portion to costs in and despite and improve of presented global commercial company initiated offset one-time indexed-based payments. in the couple Turning significant allow and offset have industry to conditions been the headwinds. expanded incremental economy past not in by quarter of Because them these savings third necessity, price reduced the aggressive program continued unprecedented our of lower discussions headwinds. able impacts out KPIs, incremental relationships for the Beginning to pricing costs the with our effectively supplier to automotive concessions, recover negotiated years. operating to our to with on revise resulted able commercial been volumes of all we the existing contracts production in imposed Slide The solid a the X, work costs. community quick and customers, true-ups, XXXX, we've performance our record us and efficiency we the virtually and built an within business improvements material of of challenges to to And agreements, our we've our have price

of as base. should Rubber only This had We we've now with volatility the have business metals. revenue to change well of our indexed-based more significantly for reduce on agreements Importantly, EPDM already limited oil-based a significantly critical and the we is our price positive our number agreements strategic magnitude the on imposes of impact customers than a impacts indexed-based our Previously, representing in having expanded indexed-based commodity agreements commodities, results as customers. include XX% future. on

Our fully to has as in done to achieve persists great with Commercial to tough results customers date a difficult team job And very to continuing a conversations remain inflation in costs be recovered. these they're positive environment. have

beneficial to continue difficult commitment relationships. ongoing I As work process and we to our engagement this business mutually to in their thank through times, get their want customers for for these together to

call of details to discuss the John quarter. financial turn to me over let the to the Now

Jonathan Banas

the results thanks, and same we next last liquidity, Hey, our our comment flows, I'll provide slide summary year. sheet, our cash to a few XXXX morning, capital some on with everyone. and good X, show Jeff, of on first results and allocation On of In quarter for detail for financial balance period the priorities. the the quarter slides, comparisons

sales were down of million first $XXX quarter X.X% quarter the versus XXXX. First XXXX

million sales million X.X% Gross efficiencies, and volumes, China. and Excluding the compared a of lower same EBITDA was impacts offset the production of material worth quarter purchasing cost our Adjusted lower being expected, gross was efforts. million It's positive net recoveries. result compares of execution or On loss $XXX,XXX cost Profitability first manufacturing was a despite of EBITDA, our in of quarter. we impacted with in XXXX. were XX.X% year partially and our break-even, in foreign the or to QX to $XX.X sales in a XXXX. the XXXX. first commodity exchange million by $XX quarter the the compared was as first a adjusted period to $XX essentially and that and for net by quarter sales. of This focus million, of for quarter in-line the the $XX.X for than U.S. basis, Sales the a of expectations optimization Credit of to the profit as ago. broader some headwinds continuing loss the compared joint in EBITDA quarter well quarter profit X.X% down to first on original again GAAP essentially deconsolidation adjusted venture was noting $XX.X

adjusted as loss expenditures million impact, $X in Capital the Excluding compared of of XXXX, $XX.X $XX.X first or to as the million the income same of associated or ago. restructuring for $X.XX quarter per diluted million totaled XXXX. share was the compared period expense year first adjusted in well $XX share, million quarter quarter and first in a $XX.X diluted to other tax special per their loss net net items,

We continue CapEx keeping below remain focus investments of the disciplined and to have for committed on full-year. X% to sales capital a

factors quantification impacting Slide XX. to provides XX, on The the Slide some of Moving results. our key additional insight and charts

related sales industry the for reduced of last volume the by Customer first million that unfavorable to supply XXXX. mix, and schedule challenges top-line, announced quarter, a in production were chain driver. customer the by of $X of the versus consolidated quarter. the million net in adjustments price reduced reductions joint we deconsolidation ongoing China sales venture A the quarter $XX major On

versus the mainly sales same exchange, by Foreign period euro reduced the year. million $XX last

for to initiatives other adjustments slow EBITDA Run-rate price higher was and a $XX cost inflationary items and were unfavorable and remainder costs than Commodity rate million. quarter, to totaling these Unfortunately, adjusted the we by For material the combined also year. by the and expense $XX continued lean of somewhat SGA&E the and up ramp and quarter. in of positives lower mix over manufacturing expect net million increase million. of $X the purchasing $X of more million, million in volume first inflation $XX of pressures savings offset drove

to offsets material addition, Jeff agreements In we increasing to that implemented, mentioned expect headwinds. as inflation the recovery are Edwards the see

Slide Moving XX. to

during flows, inventories. outflow the by outflow was Driven $XX CapEx in of months terms cash in first cash million. increases a approximately incurred million, of March used we In and XXXX, the approximately cash quarter approximately an $XX cash XX, net operations million. had loss free primarily ended of $XX of With three

the in of proceeds from million of by than cash outflow $XX approximately Europe. facility more a the offset sale Importantly, free receipt the in was non-core

$XX in has position to period our slightly XXXX. the quarter the resulting still XXst. during result, the by of made end Availability with April, first expect of as hand million. was Subsequent an the additional where a revolving further the credit As million a undrawn, and $XX XX in of $XXX loss March increased in operating our liquidity million of $XXX solid of in $XX it Act, end ended IRS still strengthen we $XXX liquidity on we was cash the as the remains first we of cares million, balance total quarter, and The million net facility, cash March balance from related refunds which to from by carry-backs QX. million our available received

that good we expanding very costs emphasize sufficient liquidity working ensure perspective. we our continue that We that with believe me are more we from Let believe on and being to our compensated customers of our for we were fairly in focus the products have top-line, a than value the to shape and supply. resources margins, growing

sheet, some on company our our the capital this is debt the of balance terms focused in maturity of the In year. of extending structure

The suitable We considering and have are approach options the identify refinancing. all for partners with timing help we assistance process, discussions monitoring to well ongoing the markets are as market most dynamics, us. long-term banking to understand as refinancing and available our to

a the maturities refinancing prepared as the both market on average concludes XXXX, loan comments. While senior [Indiscernible] our extend on That nearest B, in conditions, my consider depending debt the maturity as of further our November well our debt. secured term to loan, may we weighted to term include is also our of

So it let hand Jeff. back over me to

Jeffrey Edwards

like on goals. further capital drive on wrap discussion I'd to longer-term morning, additional efforts return our our some improve color up our structure Thanks, ongoing towards and you And to to cost this with Jon. provide our aggressively invested

up now. facing and are please that to on over lot headwinds industry that talked Slide simply years this offset very help XX. morning we to control. have turn about a previous the our we're Again, customers of our those two stepping We've for unprecedented now some us quarterly been calls and are pleased headwinds, Let's disruptions beyond our and

And can We own manage that excellence. also we can operational on control. recognize focus initiatives, never that the efficiencies, lose we things our lean and

have showing clearly we is unsustainable, what have year structure on continue in margins, are not we're years. year will return recently exiting, This operating profit. tap and many our on so of committed we've cost to we still our the times, initiatives double-digit nearly push The optimize as efforts and capital within generating next we invested either to So footprint on our underperforming to further for achieve businesses. fixing far. Slider, half few We shown, said as we the or and this this business

will of are cash payback customers and structure but cost have of strong to these will profitability, benefits. certain we're short-term profitability our aggressive us and Ultimately, provide confident that with certainly actions back deserve. take with Some we a all upfront get an will business relationships to our we allow the path and cost suppliers long-term will and leaner make that returns can't investors level to contributions more our And see our portions of positive for action. if to expect

quarters we as conjunction a We anticipate future uncertainty industry, thank the and a their and to opportunities dedication these the our continued economy global quarter begin of I'm margins I lot second for lie the While most about there and Cooper-Standard will our commitment in in formal improving is optimistic in volumes results. our see team ahead. that and challenging recovery coming I in. expect still update in agreements Providing improve, cost guidance want kick to to times. with begin during our very

say, continued in of thank let's contributions purpose, of prepared our to sustainable trust, call And are the the which each our we the up to also and to our Q&A. valuable so I want support support. together. for confidence, This success often, open create resource our customers is our are for concludes solutions As always, our comments, as and employees most critical

Operator

to assemble ask queue moment Instructions]. question for you if the [Operator One we questions. gentlemen, and as Ladies please, like would the

first question from Our Ferazani Steve Sidoti. with comes

Steve Ferazani

we're step call. Jon, appreciate timing on I'm the you. to agreements. there how Is a are early and Jeff, timing the you know major trying detail of recent. those the for those I'm challenging parts, Morning but perspective think indexed-based agreements fairly lot it that moving was see way that on agreements? the about I the and and I expansion impacting Congratulations all it's can this impact quantify of and any a point of those just from modeling and sure know at just that it? a of you

Jeffrey Edwards

as is can things of I the Again, going in started we'll back as what a this as come call, summer become we each of you We're we year. mentioned position talk whole to do to Steve, we the as volatile. have do I Jeff. as we're about is hopeful summer last that in July know, towards Yeah, be do that year the I the in process to the rest this -- in half. less Hopefully you second and the tell you mentioned, end -- year. last

are year recovery And that agreements of the year. there and while so there's that some dating quarter these far, into of fourth last back majority this go was the effective some

customers. what everything us for of certain to this requiring so different those back terms we kick in support in And went indexing our customers to X/X doing. of dates when year The are are

reason is and do to the that's by dates that's we realize listing inc we'll that you the the asked important. not to I'm all So have numerous information this we're on call, dry here that morning. answer start provide that this but the question me the you July the going call Hopefully, able to

Steve Ferazani

enough. Fair

there your there In terms production some of cautious major customers. ramp, seems some of expectations out be from to optimism for certainly

in any seeing of how May, of and and in point affecting in the improvement that we're in are the you that productions your this terms of component Now terms business? increase it's shortages at any

Jeffrey Edwards

chip we COVID said wants we This Europe, not to reasons. as for all we what shortages, as only war the would happen. not China. the still mean, obvious that you in it's like in everyone have we have is shutdowns Jeff, have I the think Unfortunately, just clean I

of lot a there's ramifications resolved. So to supply yet completely be chain that are

of to I'm it I see So this be continue be, mean, the -- tend to through think volatility some the would to but I think room, be in fair, going the I optimist we're summer. I -- to

way I right? half, chips, guess footnote have customers hopes question. statement that. While I a I more tell see that. consistent certainly same attacking week-by-week, that says, mean, think we're vehicles, business to we know for And have pretty needs in If that, view going for our the I for all inflation, behaving. that out for still. bullish we everybody so So there's second assume with long it, come would are I of we're month-by-month, turbulence period time, that we're consumer use statement certainly planning volume is then better of some a it of I several from always in assuming our can that out control. the all everybody the wants but that's we be here answering than it. the a we you be know market I the costs your I and that and the within wants to I acknowledge point be know turns until end

Steve Ferazani

did enough. in, could your efforts about thinking that's once more get Jeff. closing In something to likely you that comments, When or are If mentioned is you potential now? businesses. that, one about more how thinking unprofitable much those market exit the you're the Fair turns I

Jeffrey Edwards

you can. you have sell when when anymore, point think those to to aren't you I businesses you tend strategic you that a reach where

thumb. So we'll would to rule stick I that say that of

probably so. fixed this opportunities smooth to you doesn't don't and now talking on cost volatility options hover And fixed you the as be as at the through all they're means the in able while It and hopefully ways both go deals. our table will do the they are with enough So do mean of that more industry we than little that and and bit we get just all through things look today clouds to But I to out to keep a difficult follow We'll sit are done over the customers here there aren't those what about. serve, and to we'll have that come our we updated with that when year. we do agreements businesses. to rest we're

Steve Ferazani

luck. Fantastic. responses. Good Thanks, Jeff. all the of Appreciate

Jeffrey Edwards

Thank you.

Operator

next question Our Ward comes Benchmark. Mike with from

Mike Ward

Good morning, everyone.

I index-based Just looks are honestly, the going of the I've and significant it to timing there onto fold that developments parts of some because in. of mean, when more couple years. those seen one It two page in like Jeff, of that's contracts last quite the so XX.

hit So material inflation if the $XX that we year, would the to is that over just we commodity X, things we impact that look million this negative being a I down. expect it? equal inflation. number right as at at and for had quarter you this go course to All from hope look XQ, at way X, of look

Jonathan Banas

commodities I'll actually take the and When of we call Mike, last Hey for expected $XX color. run part XXXX, Jeff our we the year. full that about that it's add into mentioned any to came Jon. on headwind million a I let first

So before situation. that that was a was before That broke number lot economic continue out. before of was a degrade. to That the things war current

material So as could the you balancing $XXX on there. a upwards million side so we're that's continuing important that recovery efforts about of efforts headwinds why think that be those the about can and it's And now.

Mike Ward

part. second that's But right, All

Jeffrey Edwards

[Indiscernible] this is Jeff.

to answer finish Let question. the me just up that

within provide to we go and a So and as agreements inflation forward your forward. question, indexed-based the go recover certainly will contractual help means you we smooth did as that I as out mentioned,

So part of you're assumption. correct your in that

I know up, mean, just I as pressure. isn't say, that The go going I is the away. feeling that thing it continues everybody Jon to and will The other mentioned, inflation same

the significant as in that those which dealing isn't with the what It's my it we're in other we costs, of customers side conversations and agreements so our that. all negotiations the fair our are and help mentioned just extremely raw great I remarks, becoming are material of and And share with prepared deal. our customers a recovering all certainly with, on indexed-based

do July, give also, have negotiations we update see and will find able second the material we're review the we color we're hope to first more then I talk we when about inflation. inflation mentioned agreements. non-raw our we think typically And why hopeful the that that that's what the guidance half So around guys you I to of the on come that half, or year we hope those [Indiscernible]

Mike Ward

you so the material over Because there parts big if it, at is got between agreements, other last six components a look months And just and are And recovery. have the I right? that's to and which you then two million. plus the then new $XXX

the That's start expect right through. would what that price you recovery Whether we're whatever point now. peace [Indiscernible] or in. on at coming some in whether -- to looking at it's future comes of part So also

So the new you have the to you have components, correct? you recovery, then have contracts,

Jeffrey Edwards

correct. You're

Mike Ward

Okay.

programs, I looks in it customer with finally North more your your data what Does like if Is together thing, it's and customer? April the at your in America match data production to with sometimes -- and experience we Second it March top that up North look is. data get with America getting getting efficient the doesn't the match-up key key experience your

Jeffrey Edwards

is volatility to answers volume The that. release is still short. per The Two improved.

Mike Ward

short, but as bad as still was. It's it not

Jeffrey Edwards

correct. That's

Mike Ward

And with the of the Okay. Fortrex? commercialization any update then on shoes

Jeffrey Edwards

We mentioned call. the Yes. last in

we'll to detail the talk it's about so what able the Fortunately, they able to be have more and to occur FYXX, and who for First the in -- with. that we expect Quarter have of schedule been launch is maintain

that's So a positive.

particular particular it to now expanding are beyond of there beyond that right Fortrex terms a product conversations take on of line. In the going that lot order, product

positive, when make middle extremely able that of say everybody been during I the lock-down. and they've was on So it's was time would pandemic up lost to the

Mike Ward

on that you manufacturing a the price how able affecting last that mentioned pass in was there along the Are develop any holding? is something, that think I or it piece process to something improvement. that the process that quarter with you business? Fortrex Is meaningful update was and you

Jeffrey Edwards

competitive have have. properties shoe will will manufacturers still all the of Fortrex will the affordable, we we believe that the think, more have it that more product, we that a be especially positive make because with certainly product and It'll the and impact,

question, continue we terrific So to your make progress. to answer

we be what We this cleared later will June, end by hurdles tryout and of sale the expect manufacturing will expect. have our we for it that summer. That's

Mike Ward

so can like coming quarter. more just the one Jon, in the tax about and refunds sneak Okay. if And April, in it you in looks I second more, talked

working In standpoint. normal assume addition, in pattern? a a inventory is pattern we the I Can from a capital more a mentioned seasonal type working in QX, second-quarter think look seasonally You better can we quarter the pretty as So build third significant in have -- liquidity second-quarter; to [Indiscernible] well? capital quarter again seasonal with improvement you a is that right? can

Jonathan Banas

Mike, this anything the call seasonal I -- in day and just given China wouldn't age,

Mike Ward

Yeah. That's true.

Jonathan Banas

down. lockdowns chips and that China dealing issues the around -- Europe. are That's and is Hard. centered continued Industry with the shortage

give want what one I you We're managing just So trying to we it control can. to a another. through direction and or don't

Mike Ward

Jon. Thanks,

Jeffrey Edwards

this [Indiscernible] This is Jeff. is

we that lock of China point-of-view April think I the gone. basically I entire the down from should mean, month say. production is a

Certainly to we'll on, hit stay. news facilities going for mean, is it'll things to it forward we I to May normal. anywhere May to suppose getting of starting the back close good June impact expect here hopefully When full that of additional and back closer. back enter they stays there, the so China risk production lock-downs, online. is to we goes getting we as I the month an as ramp be normal have up are back as not come And to

out. in first that's normal. we production find out are backup everything with as to far getting levels it's we'll happened but terms quarter, China that still you had from So updated that's the They keep in a over of But great all to now, just window. have

Mike Ward

you, Thanks Thank guys. very much.

Operator

with Kirk next Capital. Our Ludtke from question Imperial comes

Kirk Ludtke

guys. Hello

Jeffrey Edwards

Hey Kirk.

Kirk Ludtke

the presentation. taking and the for you Thank question

recoveries? $XX the Slide is on follow-up to net Just of million, XX, that

Jonathan Banas

material we faced. that that's or Kirk, No. gross the inflation commodity

Kirk Ludtke

And Okay. --

Jonathan Banas

the the are for in recoveries a in and include mix. dollar-for-dollar would those the volume Because price we adjustments, recovery essentially sales walk

it there convenience, most X, included price-related because there number piece it's for the it because commercially we for is part. Just we put but just sensitive,

Kirk Ludtke

That's now originally helpful. And forecast is the it. $XX million? you million -- million the that $XXX Got $XX

Jonathan Banas

high we're as be now. as what is $XXX Yes. could right It million facing

Kirk Ludtke

Okay. And support Got [Indiscernible]? that types pursuing customers curious. customer than Are it. other I there other negotiations, the you're am of

Jeffrey Edwards

is this Yeah. Curtis Yeah. Jeff.

what's mean, are in but as about those table. As tooling things of tooling We have inflation labor, to stops Part energy, remarks, material our non-raw the not new I non-raw as well. of most raw the prepared terms programs. act the customers for all clearly starts Historically, material the bank on I materials. recovery, mentioned via that continued talk only and suppliers transportation, in

And so good about has for paying there than our been progress historically. and sooner conversation helped that have there also would them that's they And liquidity. there

correct material. raw you're than just that more stating in it's So

Kirk Ludtke

the least, you with respect about, I Thank talk Great. region, you. but just And then a quarter first to out production could rolling schedules, see just know to at it's second maybe you situation, fluid production directionally how by quarter down. up,

Jeffrey Edwards

you've -- got we Yeah. presented the that. well, so quarter, Jeff, as first just so This is we

just for quarter. and Shanghai has an lockdown As China been COVID change between first obvious specifically, ago, second minute discussed a we purposes and

So well. down business which production the factories is for us, Shanghai and virtually there no in April customers were those certainly our our plans was as in of majority

when that be. at look probably would we I we're we XX% So of what at say that's thought we would Europe, different.

Second And so then the don't that a with was shortages chip I lot we And North the different attribute well-documented, see Quarter in Quarter. Ukraine. America, the that supply the war First it and here in being than chain to whole it's other shortages. in

quite those there like a they mentioned, And the aren't releases they on get mean any. would achieving we I volatility, isn't basis, is that that monthly historically. As there have doesn't less

again that's labor chain them. for related supply So or

first. was So I don't see in than that the much different America in in the Second North it Quarter

the been a the the come to a I fourth that head as North Encouraging that said, that's America, I'm related starting those has percentage, mentioned, is volume. in chip better up and that to than have back. but China, In starting are view have customers being here of so like those much so to I be that news quarter been, think it as the point volume seems get availability largest and hopeful facts. of footnote clear third back then to there plants at our than we pretty about to statements, case, into open from to we I the lower is approval are Shanghai, of with less each recognize May, XX% a

so that expect go a as of Again, be by normal I were they and and point our we plan. first was worked, that they're of like expect quarter third that I Hopefully, a back you Asia. tough volume a quarter -- what had more month assuming state look related, from second-quarter we on operation. June, in the to would quarter, COVID all lock-downs think business is a did. We the bit that's Actually view, they improve to little through ahead of to going first expect would lock-down fourth said, of to But May.

question. everything out hopefully public information out really some being try it So color will some but customers, you. I and your answer is way there handed to for by that's just to our And I summarize said that

Kirk Ludtke

your market, say? with the helpful. And that's you overall China consistent in is -- mix your would Yeah, product

Jeffrey Edwards

Our in China is business business. primarily sealing

Shanghai. who directly are a largest happen presence the to automakers manufacturing in have Our related two to volumes and large China

So weeks was that's impacted what here. last six the

Kirk Ludtke

you. Great. I Thank appreciate.

Operator

-- question next Our

Jeffrey Edwards

Great.

Operator

-- Suisse. comes Credit from with Kevin Mcveigh

Kevin Mcveigh

Thanks for going? it how's the taking question. guys, Hey

you a both of clarifying headwinds. some Just of the will and I combine color the visionary from me, points one a around indexing couple quick real that made think the

XX, I guidance the it's materials go presentation, bridge headwind. on $XX I million that EBITDA, quarter econ negative Slide fourth think back if to the So and

higher. column, sounds indexing, somewhere million, close guidance that's positive but you like bridge, on the could great like going on to a be because Sounds think $XXX $XXX of mix million which in flip-side the price was vol progress the this going

So think to Steve's to profitability the indexing the secondly, the then just sense? question right in it is impact. And and push pull back that around of timing to about

front. that it provide months, the you business? you indexing incrementally clarify, is you that that was impact to that Those year last start any Just sounds to profitability? indexing like what over can Thanks. will last curious positively benefiting potentially through already longer on to pushed of color Does mean it two in said that you passed that on take the couple

Jonathan Banas

Sure, Kevin, here. Jon it's

full-year would both any new hold, are about of on XXX mind as but of keep recovery right the any bridge as recoveries take dependent. inflation, You're the estimate the guidance commodity volume in million effect well how

that's actually we've Because agreements. you volumes are that that subject those anything that's have effect. also through linked to the volume So number how mix mind index-based here a to lag is that But all produced. there in flowing is keep

seeing far previous that It in as particular through, to as in tied come to we're QX or quarters. QX was quarters. saw what recoveries here wasn't tied we So

active retro, an gradual that some it periods see standpoint, And forward. to if sum a may be going But we there's negotiate So from lump lag you're recoveries. catch-up earlier to but can indexing that's effect. going those of effect there's

frame that it. hopefully helps So

Jeffrey Edwards

expect saying the today and to point the a we've And other it The recovered, again little said of said we've well. that. XX% you also we call, to that range [Indiscernible] So of is high Jeff. that have to recovery traditionally and the we're color we continuing we're it's to as XX% right? high we that in end end And to This last be historically. towards said the

can So it volume talked you about, we today, the impact give Jon that's timing the Jon direction about that when the hits. talked that that

confident we're recovery say able forward sustain more we've because would that the of this continues. level I volatility negotiated, so the we're that to going indexing of And as

that's than to we've clearly here you they better to it once all those do able you real future kick I help in, when what ever. the we're that -- well, are think been model and able will show agreements positive and So the

Kevin Mcveigh

different that, your Thanks, and quarter, there sort I than commentary trying me regarding quarter, slightly in the the comments comment is, a particular, capital focused on of the it for more was solution your reading sounded and Jeff leaves if and bonds, Jon. like loan there. for last first-lien specifically you tea I'm making the in last to as Last one include loans about structure, thanks candor the and Totally potentially around appreciate this that are quarter now term believe XXth well.

that read what's in and that change? my change is language So so, if driving of accurate,

Jonathan Banas

Kevin. This think I is it's accurate. Jon

capital continually I for at we opportunities think options structure it, as us. overall, to we're considering and and conditions [Indiscernible] the all market all evaluate improve the look and opportunities

we're it we're last so we've saying all wasn't so much as that it opportunities looking out in much my ruled quarter comments now. So, right at here

Kevin Mcveigh

for Understood. the time. Thanks so much

Jonathan Banas

Kevin. Thanks,

Operator

Baird. from DiRubbio with Brian Our question comes next

Brian DiRubbio

Good overseas? point. U.S. you is that much morning. versus of on [Indiscernible] questions in A cash the housekeeping today Jon, couple the how have

Jonathan Banas

efficient the arrangements Brian, I cash But via the move the don't we rest region have we inter-company most have role, that the plays That qualitatively. can wherever where Cooper-Standard structure need says, for it very the handy, we but profitable, it for is the bank money let to me just a of characterize the pooling part. regions. oftentimes America as most as North

you're items, fairly refunds, on are going IRS based. a about of talking when ticket China self-funding they're there. mechanisms to Our European The European certain these Asia-Pacific the U.S. leaseback, various be clearly But through clearly operations sale -based. big

but looking but that mechanisms the an you're U.S. it's evolving most as cash, So structure, efficient move for part, at to necessary. an based around

Brian DiRubbio

that ago. could queue, helpful little just amount a if of investors Switching inter-company there. breakdown it gears is rates be just lot now. that close Market Cash potential also, notes a would you of six that turmoil, higher flush weeks It'll they the as to obviously Okay. a than I were are maybe help think market refinancing. the pertains right little in bit the much is

feel do how you comfortable using some this So cash. of possibly

just get that to the to debt are of pay have I'd You potentially interest a love balance going costs today going given thoughts your So ahead sheet down forward? your to balloon there. refinancing,

Jeffrey Edwards

etc. term. But as a as at near we shutdowns, below had very, issue. look interesting at Like through trading disruptions table, the on costs the we for we least forward the here live, key look, as to the us sorry, Yeah. up. very -- manage through, we unsecured conferred Brian, we manage it's earlier, but look options going the and Liquidity mic $X.XX Yeah. or I all is are

cash will, structure makes that the going using and So we the some at capital if optimize if we consider sense can to of forward, help the time.

So looking at all I'll just leave it at that, options. just we're saying

Brian DiRubbio

makes importance the strategic long? really to global you have company, U.S., U.S. earlier outside the much. What's that fair [Indiscernible] be at Jeff, to so for good the And it returns the of looking given the business want back that Just That's And really go have U.S. sense thoughts in not business. the keeping been Okay. the love of so Outside there. you about for or made that the business enough. holding a at Cooper-Standard, looking your Cooper so U.S? I to comments does poor outside

Jeffrey Edwards

having with that's customers. Well, conversation we're our the

as be and want yes, want other we yes, America today, the us we you they we sit to we want yes, spots. we answer And you in here give in you be the so is to Brazil, you to and yes, in be in and want China North to be Europe

so find out. we'll guess And I

Brian DiRubbio

having you there, Well, guess, that obviously having you two factors. different develops. as we'll want pay for them being there I and them see

Jeffrey Edwards

That's correct.

Brian DiRubbio

color. the you. Thank Appreciate

Operator

Taykowski, Our next from Suisse. question Credit comes Josh

Josh Taykowski

Hey, guys, questions. maybe the the Most good like some been taking already. had on thanks progress But negotiations. for of sounds mine answered recovery

color leasing if way, maybe if the wondering you me are for I what immaterial provide you me, the in you you're is percentage you I from did ongoing kind kind to amount to want annual of get business. But another Europe footprint piece this the quarter, sale know just the back? or what that that one on rent is release said Just it was could of back that any start leasing the to for housekeeping annual the of

Jonathan Banas

the bucks for. for you I'll million we term signed less the that up number. just give a year a three-year It's than

Josh Taykowski

of So much a than sale sale a leaseback. more

Jonathan Banas

Yes. Correct.

Josh Taykowski

Okay. And question conversation just then indexing versus bit, just to a about one dead recoveries. a horse the ask on to beat wanted

FYXX, economics incremental. faced, the about mean majority was in expect you $XX already? headwinds You FYXX FYXX. this that you Will the of of percentage had for quarters? of back back million [Indiscernible] you I in the so, of in gotten to it And the expected that coming headwinds incurred one if Does recovery X-K the think yesterday the increasing material full-year percentage and get what on FYXX

Jeffrey Edwards

Yeah, this Jeff. is

publicly and important range for it's broken note that end talked recovery recovery of that about is percentage we haven't say to XX% What is this all significant you the the being that in that year. on Jon to delivering. this down it conversation the think way. for of far what for year that's saying I'll are Where that is we're I is We range what the negotiated this increases that just at is table XX%

in higher inflation year and a any of an to better have And including recover than so position our we from of in fair FYXX, history, we're as much those our or been higher get numbers view, those point at those share continue to FYXX.

especially say ideal, to in you So didn't the could it terms of I than customers XX if allow probably way, less have to place. their is if what supply were willing that base indexing recover, in

it taken a a recovered. they've think resulted recognized costs negotiation that impacted if severely FYXX, of large being the there would And be in serious base that it's and those more I that much serious not wasn't in supply portion sustainable.

than We XX. else it no FYXX choice. FYXX. We've we we about have FYXX different anybody didn't history. I is publicly no So we're there, like terms how said feel think in of though

to the and us I we're issues. us non willing raws. You last with every every all in resolve help but our in got in really material -- us and the just one there, to And appreciate I I they all and work they're region our us bridge our they've these engage continues through. to managing done as have that And customers said, of what that question, way tell mentioned to I this want to done us customers for - not to pay raw everything important very for as very other conversation,

a happening. around it is So call. And that's that's in for right we'll what the now. I we have -- stick Hopefully answer more that believe with clarity just July

Josh Taykowski

the Thanks, Appreciate Got color. it. guys.

Operator

Goldman Our Sachs. last Gupta from question comes with Prateek

Prateek Gupta

have just please. quick question, I one morning. good Hi,

further in in XQ So announced [Indiscernible] talk you're bit sales [Indiscernible] improved that of a you you not, [Indiscernible] could and forward, going of have assets if one about planning terms be? scope FYXX. asset you Can if done any have little

Jeffrey Edwards

again? hear little the closer to a a to very you. microphone? difficult Can Prateek, we're you having Maybe time try

Prateek Gupta

better me now? hear you Can sorry. I'm Hi.

Roger Hendriksen

now. that's Yes, Thank you. better

Prateek Gupta

asking those could if Yeah. completed have the -- I check considering scope one or wanted be? asset FYXX. No, sales are in further and you you the planning XQ, so sale that just I was asset about -- of what to

Jonathan Banas

Prateek, a rather it's property non-core assessment entered more of than Jon. play. in leaseback Right. it we transaction, liquidity Hey When that a sale was

we need So generating an go proceeds. didn't for immediate into

were we So simply being to capitalize conditions market on there. opportunistic

we call in with earlier, exiting conjunction As as Jeff initiatives. our unprofitable any we asset businesses said committed sales, the footprint on or total cost review additional the operations. as fixing are either possible optimization or far ongoingly to And

to current your role no a sales strategy, you will. asset that if attention would play call [Indiscernible] So could plans but in future that

Prateek Gupta

you. Thank Okay.

Operator

I This gentlemen. like call [Indiscernible] portion the and to concludes Q&A of would today's Hendriksen. the conference. Ladies turn Roger

Roger Hendriksen

Thanks, Okay. today. questions call engagement on everybody the your for for the and

This have to If you concludes questions you to for free give and ask, call. we'll me time you other to a thank our feel spend please that today. Again, arrange your call time together. Goodbye. able weren't some

Operator

presentation. today's Ladies and gentlemen, that concludes

disconnect, wonderful now a may day. You and have

Cooper-Standard (CPS) 13 May 222022 Q1 Earnings call transcript